1st Dec 2008 11:39
LENI GAS & OIL Plc
("LGO" or "The Company")
1 December, 2008
Gulf of Mexico Drilling Success
Leni Gas & Oil plc (LGO) the AIM listed international oil and gas exploration, development and production company notes today's Drilling Update by Leed Petroleum ("LDP") announcing that the Eugene Island A-8 well has reached its total depth and has encountered commercial hydrocarbons in the two primary well targets. It has also been announced that once production from the A-8 well has been completed and the drilling rig is off location, Leed Petroleum intends to re-complete the A-6 well from the existing platform as a long term producer from the well's primary zone.
The Eugene Island acreage is operated by Leed Petroleum, in which LGO has an indirect interest through its 28.94% holding in Byron Energy Pty Ltd ("Byron"). Byron has a 25% Working Interest in both Eugene Island Blocks 183 and the southern half of Block 184 (Net Revenue Interest up to 20.83% in Block 183 and 19.17% in the southern half of Block 184), including the Eugene Island 184A platform and production facilities. Byron has also a 12.5% Working Interest (Net Revenue Interest 9.58%) in the northern half Eugene Island Block 184 and 10.37% Working Interest (Net Revenue Interest 8.64%) in Eugene Island Block 172, excluding the Eugene Island 172 producing reserves and platform.
David Lenigas, Executive Chairman, commented:
"Today's news from the Eugene Island development drilling campaign marks further extremely positive developments on the acreage. The A-8 well drilling results confirm the huge potential of Eugene Island and we look forward to reporting the production schedule, together with existing production from A-6 and A-7, in the near term."
Competent Person's Statement:
The technical information contained in this announcement has been reviewed and approved by Fraser S Pritchard, Director of Operations for Leni Gas & Oil Plc (member of the SPE) who has 20 years relevant experience in the oil industry.
Enquiries:
Leni Gas & Oil plc
David Lenigas, Executive Chairman
Tel +44 (0) 20 7016 5103
Beaumont Cornish Limited
Roland Cornish / Rosalind Hill Abrahams
Tel +44 (0) 20 7628 3396
Mirabaud Securities Limited
Rory Scott
Tel +44 (0) 20 7878 3360
Pelham PR
Mark Antelme
Tel + 44 (0)20 3178 6242
Leed Petroleum PLC today announced the following:
Leed Petroleum plc
("Leed" or the "Company")
Drilling update
Leed reports 3rd back to back drilling success in Gulf of Mexico
Leed Petroleum PLC (AIM: LDP), the oil and gas exploration and production company focused on the Gulf of Mexico, announces that the Eugene Island A-8 well has reached its total depth and has encountered commercial hydrocarbons in the two primary well targets.
The Eugene Island A-8 well was spudded on 6 October 2008 and reached a total measured depth of 15,470 ft on 25 November 2008. The primary objectives of the A-8 well were a superior "take-point" from the exploration target discovered by and currently producing via the A-6 well, as well as to test one exploratory zone. Electric line logs have confirmed that the Company encountered three pay sands, containing a total of 155 feet of true vertical thickness pay.
The Company is currently casing and completing the Eugene Island A-8 well for production from the deeper objective, which has 96 feet of true vertical thickness pay. First production from this zone is expected to occur by the first quarter of 2009.
Following the completion of the A-8 well, Leed plans to release the Ensco 98 drilling rig. The Company is reviewing the Gulf of Mexico rig market and making plans to drill currently undeveloped properties in the Company's portfolio during 2009.
In addition, once production from the A-8 well has been completed and the drilling rig is off location, the Company intends to implement its plan to re-complete the A-6 well from the existing platform as a long term producer from the well's primary zone.
The Eugene Island Blocks are located 50 miles offshore, south of Morgan City, Louisiana in the Gulf of Mexico in approximately 80 feet of water. Leed's management has built an inventory of development projects and exploration targets across the Eugene Island Block 183/184 Field.
Howard Wilson, President and Chief Executive of Leed, commented:
"The drilling programme at Eugene Island has been a great success for Leed. It has proven transformational in terms of the Company's developed reserves, production and revenue base and delivered the Company into a profit during the three months ended 30 June 2008.
We plan to return to drilling at Eugene Island at a later date as there are numerous exploration and development projects still to be drilled in this prolific, low risk area. But it is now time for the Company to move on and develop additional fields in the portfolio and diversify the production base.
The success at Eugene Island clearly demonstrates the excellent risk-reward profile for our shareholders, with the ability to add material value at relatively low risk and cost. This strategy will be replicated throughout our other properties, which will enable significant value to be generated in the short to medium term."
NOTES TO EDITORS
Leni Gas & Oil Plc is an international oil and gas exploration, development and production company headquartered in London, trading on the London Stock Exchange's AIM index. The Company has assets in the US Gulf of Mexico and Lower 48, Spain, Trinidad, Hungary and Malta. LGO's strategy is delivering growth through the acquisition of proven reserves and the enhancement of producing assets in low risk countries.
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